MacAskill: "Just as it seems it can’t get any worse, it sadly does."

These days just as it seems it can’t get any worse, it sadly does. Few thought there could be worse than Boris Johnson and then along comes Liz Truss. Likewise, the catastrophe of the Chancellors mini budget continues to wreak havoc, lurching our economy further towards the abyss. The unfairness of it now superseded by the disaster it’s unleashing on our economy.

Pension funds were threatened and now it’s the calamity of rising interest rates. The former action’s quite incredible especially when he was warned. But hey ho his rich pals wanted their tax cuts and hedge funds were waiting to pounce with us paying the price. So, on he plunged.

Now those on mortgages will be fearful of what winter might bring and that’s along with the energy bills they’ll be expected to pay. If interest rates go to 6% as is predicted, it’ll be even higher for mortgages. Families will be expected to find several hundred pounds more per month when they’re already struggling. Even those on fixed rates know that a day of reckoning will come when the cost will rocket. How are they to prepare for that? Wages aren’t rising anything like the cost of living.

The effect on businesses is just as harmful. All these tax cuts for the rich were supposed to see a surge in growth but rising interest rates will see businesses fold. Many businesses operate on overdraft. It’s just part of the job and they can’t operate without it. It was that way in my legal practice as it is for my friend in his joinery firm.

Rising interest rates will hammer them as overdraft rates, as with mortgages, are higher than the base rate. This means that businesses already operating on the edge, struggling to meet energy bills might well go to the wall. That’ll apply across the board to those offering professional services as to those doing trades. Firms that were built through hard work and effort over years and sometimes generations will crash.

This is incalculable self-harm to our economy. Johnson only said “F business”, Kwarteng’s now doing it.

First published in the East Lothian Courier – 6 October 2022